Shanghai Disneyland to reopen

Company didn’t say when Orlando park will follow

Shanghai Disneyland will be the first of Disney’s empty theme parks to reopen next week, with visitors and workers wearing face masks and crowds limited, Walt Disney Co. said Tuesday. But the company didn’t say when Orlando’s Disney World turnstiles would spin again.

Walt Disney Co. disclosed Tuesday the impact the coronavirus pandemic has had on one of its biggest cash cows — theme parks — in the latest financial quarter ending March 31.

“Like so many other companies and industries, the pandemic has hit us hard,” Disney executive chairman Bob Iger said.

For the second quarter, operating income plummeted 58% from a year earlier to $639 million in the parks, experiences and products division.

Closing its U.S. theme parks for about two weeks alone in midMarch cost Disney more than $500 million as attendance fell 11% for the quarter, chief financial officer Christine McCarthy said during an earnings call. The full blow came to about $1 billion in operating income for the theme park division since some Asian attractions started closing in late January.

Even so, overall revenue for the quarter rose 21% to $18 billion, just ahead of analyst forecasts of $17.8 billion, Reuters reported.

Disney also said Tuesday it plans to skip a semi-annual cash dividend payment of $1.6 billion while ESPN airs no live sports, new Disney movie releases are delayed and company cruise ships are stuck in port.

Executives gave the most detailed news Tuesday about the future of theme parks.

“We are seeing encouraging signs of a gradual return to some resemblance of normalcy in China,” recently promoted Disney CEO Bob Chapek said.

When Shanghai Disneyland opens May 11 in a post-coronavirus world, it will entertain far less than the 80,000 people it can normally hold. The Chinese government has set a 30% capacity limit, but it will take several weeks for Disney to build up to that 24,000 daily limit, Chapek said.

“We’re going to actually open up far below that just to have our training wheels on with our new procedures and processes, to make sure we don’t have any lines backing up as guests enter into the park or as they wait through the park,” Chapek said. “We’re going to approach that very, very slowly.”

Date-based tickets will help Disney control attendance.

Characters — think Mickey Mouse — will still be seen inside, although they must abide by social-distancing guidelines and avoid the masses.

Hand sanitizers will be installed in the ride queues and at exits, while masks and temperature checks will be the new norm,

the company disclosed

Chapek stressed, however, that each theme park is unique so Disney isn’t taking a uniform approach to reopening all of its theme parks across the world. He outlined some of the measures after a Wells Fargo analyst inquired about Disney reopening, even though no vaccine exists.

So far, the virus has killed nearly more than 140 people in Central Florida and nearly 1,500 statewide according to the latest reports Tuesday.

As analysts tried to glean more about Disney’s future, Chapek said Imagineers will keep developing future projects, although the company will stay mindful of costs.

“Obviously we had a lot of really big plans in the parks — and we still continue to have big plans,” Chapek said. “Those good ideas before COVID are going to be really good ideas after … We’re just going to go ahead and take a slightly finer tooth comb, if you will, through those expenditures.”

At times, Disney executives took a similar tone Tuesday as during a March 11 shareholders meeting where they pledged Disney brand was strong enough to endure such an unprecedented economic crisis.

“The Walt Disney Company has demonstrated repeatedly over its nearly 100-year history that it is exceptionally resilient, and I believe this time will be no different,” Iger said.

Tuesday was the first earnings call for Chapek, who took over as Disney CEO on Feb. 25.

Disney’s competitors are also hit hard during the pandemic.

Universal’s theme park division plunged 32% to $869 million in the first quarter of 2020 and executives at parent company Comcast announced last week they had frozen work at its under-construction third theme park in Orlando. Universal’s Epic Universe park, set to open in 2023, now appears to be delayed by a year, Orange County Mayor Jerry Demings said last week.

Orlando-based SeaWorld Entertainment is expected to release its firstquarter earnings Friday.

On March 15, Magic Kingdom held its last fireworks show as large crowds gathered to say goodbye. Weeks later, no official opening date has been announced as state and local officials discuss protocols for reviving businesses.

Walt Disney Co. has paid full wages for its employees through April 18. After that, the company furloughed the majority of the 77,000 Disney World Resort employees, including all but 200 employees of its largest 43,000-worker union coalition.

Now, many Disney workers are still struggling to access the Florida unemployment system and receive their benefits.